If you’ve been following me for longer than a few weeks, you might recall an email I sent out where I gave quick, actionable money tips that were only one sentence long.
Since so many people replied to to that email, I’ve decided to give you more. So, for the next five days, I will take each of those tips and break them down even further for you.
I don’t expect you to route through your cluttered inbox to find that old email (I’m not a monster). To recap, my tips were…
- Spend less than you earn, and invest the difference.
- You don’t need to spend a lot of money to have a good time.
- Read more books and fewer articles.
- If you’re worried about how your investments are doing, don’t read forecasts – read history.
- Don’t be thrilled that the credit card you’re paying 22% interest on offers 1% cashback on all purchases.
Let’s start with spend less than you earn, and invest the difference.
Okay, I have to get on my soapbox a little bit here. There are people out there who earn a decent income – enough to cover a slightly above modest lifestyle – but still live paycheck to paycheck because they live a champagne lifestyle on a mid-level wine budget.
Some examples of this are those people you see spending the vast majority of their income on a home. Did you know you shouldn’t be spending more than 30% of your income on your housing costs? This includes mortgage/rent/property taxes/heating.
Those who buy the latest electronics but struggle to pay their bills.
Those who eat out several times a week and don’t know how to cook for themselves – that’s flipping expensive!
And – how do many people afford that lifestyle? If you said ‘they use credit cards’ – bingo!
Look, if you can afford to live that kind of lifestyle, great – but most people can’t. If you want to prepare for your financial future and have a long, happy retirement, the best way to do that is to, you guessed it, spend less than you earn and invest the difference.
Here are a few quick ways to get started on practicing this motto.
- If you’re living in a high-cost-of-living area, like a major city, consider downsizing to a smaller home or maybe even relocating to a lower-cost location. I know it’s a big ask, but you could save so much this way.
- Hang on to that phone. If your cell phone contract is close to being over, you don’t automatically have to upgrade and tack on extra costs to your phone plan.
- Learn how to cook at home and meal prep. Not only can you save a bundle, but you’ll also eat way healthier. A quick Youtube search is all it takes to get started. Take the time to master a handful of your favorite easy recipes, and you’re golden.
All the money you save? Invest it. This is how you build real wealth and get the lifestyle you want in retirement.
I can’t offer you specific investment advice in an email like this, but I can tell you that as a financial advisor, my job is to holistically review your entire situation – goals, current assets and debts – and come up with a money management strategy that is perfect for you, no matter what stage you’re at.
The choices you might have made in the past don’t matter – I’ve seen it all. What matters is that there’s hope that you can turn it around and get on track today.
So what should you do now? Easy. Pick up the phone and call 513-563-PLAN (7526) (or book online) to get in my calendar for 15 minutes. Let’s start you on the path to finances you can feel great about.
Regards,
Nikki Earley, CFP®
